Chart Of The Day

09.28.14

“So it seems that the theory behind trickle-down economics has been empirically refuted: its impact has been overwhelmingly trickle-up. It is also quite clear by now that huge tax cuts do not remotely pay for themselves – and the recent experience in Kansas only adds a final coda to this. And yet the GOP shows absolutely no sign of absorbing these facts, or having anything to say about the dangerous political instability of huge social and economic inequality and crippling debt that are their consequence.”

The GOP is more of a religion than a reality-based political party. It’s one thing to adhere to dogma when it comes to things that cannot be disproven, like what happens after you die, but it’s quite another when there are decades (or more) of empirical data supporting concepts like trickle-down economics doesn’t work at all, or evolution is real, or tax cuts don’t pay for themselves, or climate change is real and greatly influenced by humans. No surprise then that many Evangelicals are also Republican. Both require blind faith in the face of contradictory evidence.

The precise numbers (from Piketty and Saez) can always be argued with, but the basic trend is hard to deny. After the end of each recession, the well-off have pocketed an ever greater share of the income growth from the subsequent expansion. Unsurprisingly, there’s an especially big bump after 1975, but this is basically a secular trend that’s been showing a steady rise toward nosebleed territory for more than half a century. Welcome to the 21st century.

Through mid-century, when times were good economically, most of the benefits trickled down to the bottom 90 percent of households. Then came the Reagan era and actual trickle-down economics. Suddenly, the benefits started sticking with the rich. Since 2001, the top 10 percent have enjoyed virtually all of the gains.